The tranquility of Safed, a small Israeli city nestled high in the hills of the Upper Galilee close to the Lebanese border, is not usually disturbed except by the occasional pilgrimage by Madonna or other famous devotees of the Jewish mystical teachings of Kabbalah.

But in the past few weeks, Safed — one of Judaism’s four holy cities — has been making headlines of a very different kind. Gideon Levy, a columnist for the Israeli daily Haaretz, last week declared it “the most racist city in the country”.

The unflattering, and hotly contested, epithet follows an edict from Safed’s senior rabbis ordering residents not to sell or rent homes to “non-Jews” –” a reference to the country’s Palestinian Arab citizens, who comprise a fifth of Israel’s population.

At an emergency meeting, called last month to discuss the dangers of “assimilation” caused by Arab men dating Jewish women, the 18 rabbis warned that Safed was facing an “Arab takeover”. Jewish residents were told to inform on neighbours who try to sell or rent to Arabs.

The number of Arabs in the city, though low, has been steadily rising as Safed Academic College has expanded. There are now some 1,300 Arab students enrolled at the school.

The rabbis’ statements have provoked a series of riots by local religious Jews, in which several Arab homes have been attacked to chants of “Death to the Arabs”. In one recent incident, three Arab students were beaten as shots were fired.

So far three Jewish youths, including an off-duty policeman, have been charged with participating in the violence. The policeman is accused of firing his gun.

The anti-Arab campaign escalated last week as posters were plastered across the city threatening to burn down the home of an elderly Jew if he did not stop renting to Arab students.

The owner, 89-year-old Eli Zvieli, said the posters appeared after he received phone threats and visits from several rabbis warning him to change his mind.

Jamil Khalaili, 20, a physiotherapy student at the college who rents an apartment with a friend in a Jewish neighbourhood, said the atmosphere in Safed was rapidly deteriorating.

“We’re being treated like criminals, like we’re trying to steal their homes,” he said. “It’s got the point where many of my friends are wondering whether to leave. I want to study here but not if it costs me my life.”

Leading the opposition to the presence of Arab students in the city is Safed’s chief rabbi, Shmuel Eliyahu, who is employed by the municipality as head of its religious council.

“When a non-Jew moves in, residents begin to worry about their children, about their daughters. Many Arab students have been known to date Jewish girls,” he told Israel National News, the main news agency of the settlement movement.

The 18 rabbis issued their joint statement after learning of the city’s plan to build a medical school, which is expected to draw Arab students from across the Galilee.

They urged Jewish residents to shun a “neighbour or acquaintance” who rents to Arabs. “Refrain from doing business with him, deny him the right to read from the Torah, and similarly ostracize him until he renounces this harmful deed,” it read.

They have been given backing by a former chief rabbi, Ovadia Yosef, who used a recent sermon to tell his followers that “selling to [non-Jews], even for a lot of money, is not allowed. We won’t let them take control of us here.”

Similar anti-Arab sentiments have been heard in two other Jewish cities in the Galilee, Karmiel and Upper Nazareth. Both were established decades ago as part of a government “Judaisation” programme to settle more Jews in the country’s most heavily Arab-populated region.

In Karmiel, 30km west of Safed, ads in local newspapers have been promoting a special email address for residents to inform on neighbours planning to sell homes to Arabs. According to Ynet, a popular news website, the email account is overseen by officials for Oren Milstein, the city’s deputy mayor until he was fired last week.

Adi Eldar, the mayor, said Mr Milstein had “damaged the city’s image” after he gave a newspaper interview in which he boasted that he had prevented the sale of 30 homes to Arab families.

Mr Milstein’s replacement as deputy mayor, Rina Greenberg, is a member of the far-right Yisrael Beiteinu party of Avigdor Lieberman, Israel’s foreign minister, who advocates ridding the country of many of its Arab citizens.

Meanwhile, the mayor of Upper Nazareth, Shimon Gapso, who is also allied Yisrael Beiteinu, has announced plans to build a new neighbourhood for 3,000 religious Jews to halt what he called the city’s “demographic deterioration”.

Hundreds of Arab families from neighbouring Nazareth have relocated to the Jewish city to escape overcrowding. Today, one in eight of Upper Nazareth’s 42,000-strong population is Arab.

In August, Mr Gapso said he felt “as happy as if I had a new baby” at the news that 15 extremist families from the former Gaza settlement of Gush Katif were establishing a Jewish seminary in his city.

Hatia Chomsky-Porat, who leads Galilee activists for Sikkuy, a group advocating better relations between Jews and Arabs, said: “The political atmosphere is growing darker all the time. Racism among Jews is entirely mainstream now.”

In Safed, the Arab student body, heavily outnumbered by nearly 40,000 Jewish residents, has tried to keep a low profile. However, one small act of defiance appears to have further contributed to Jewish residents’ fears of a “takeover”.

Inhabitants awoke recently to find a Palestinian flag draped on the top of a renovated mosque — one of the many old stone buildings in Safed that attest to the city’s habitation long before Israel’s establishment.

In 1948, when Jewish forces captured the town, Safed was a mixed city of 10,000 Palestinians and 2,000 Jews. All the Palestinian inhabitants were expelled, including a 13-year-old Mahmoud Abbas, now the president of the Palestinian Authority.

Mr Khaliali said the city’s history appeared still to haunt many of its Jewish residents, who expressed fears that Arab students were there to reclaim refugee property as the vanguard of a movement for the Palestinian right of return.

It is not the first time Mr Eliyahu, the son of a former chief rabbi of Israel, has been accused of inciting against the city’s Arab population.

In 2002, during a wave of suicide attacks at the start of the second intifada, he called on Safed college to expel all Arab students.

Two years later he launched a campaign against intermarriage, accusing Arab men of waging “another form of war” against Jewish women by “seducing” them.

He narrowly avoided prosecution for incitement in 2006 after he agreed to retract his earlier statements.

The Religious Action Centre, a group of Reform movement Jews, and several Arab MPs have demanded that Yehuda Weinstein, the attorney-general, investigate Mr Eliyahu and the other rabbis for incitement to violence.

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A version of this article originally appeared in The National, published in Abu Dhabi.

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